Spring Budget 2024: Understanding the Property Market Impact


A raft of changes will affect landlords and property portfolios

Chancellor Jeremy Hunt’s Spring Budget announcement was eagerly anticipated amid ongoing economic uncertainty.

The main measures had been heavily trailed, and the Chancellor did not spring forth any major surprises. Some ideas that had been floated previously, such as a 99% mortgage, ultimately did not make an appearance.

The broadly sunnier outlook across the economy was reflected by a forecast released by the Office for Budget Responsibility, the government’s fiscal watchdog, which predicts that inflation will fall below 2% by the end of June and then drop again to 1.5% next year.

Below, we explore what some of the most substantial announcements from the Budget mean to the housing market.

Capital gains tax on property cut

From April 6, higher-rate taxpayers selling residential property will pay less capital gains tax, as the rate is cut from 28% to 24%. This is designed to increase government revenue by stimulating house sales. Forecasts suggest that this measure could bring in up to £350 million by 2025-26.

For many landlords, this reduction will feel insufficient, especially as the tax-free allowance will halve to £3,000 from £6,000 in January. However, for some, it does also present an opportunity. Landlords with underperforming properties may now be more inclined to sell up and explore new investment opportunities.

For those property investors who frequently buy and sell, they will be able to benefit from significant tax savings while adjusting their property portfolio.

Shaking up the sector

The abolition of multiple dwelling stamp duty tax relief – which was described by the Chancellor as showing “no evidence of promoting investment in the private rented sector” – and scrapping tax perks for owners of holiday lets could have an impact on property investors. 

Measures targeting non-domiciled individuals, meanwhile, could potentially affect the high-end property market, particularly in areas favoured by international investors, such as prime areas of London.

The existing colonial-era rules allowing some wealthy foreign nationals to avoid tax on earnings from overseas if they have lived in the UK for less than 15 years are to be swapped for a new regime. From April next year, non-doms will pay the same tax as other UK residents after four years. Axing the current system in favour of a “modern, simpler, residency-based system” is expected to raise £2.7bn a year for the Treasury.

As always, the Henry Dannell team is here to provide expert advice and guidance which will enable you to make informed decisions. Get in touch with us to find out more about our offering and how we can help you achieve your mortgage goals.

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